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Ferrexpo reduces pellet production by 67% in Q1
KYIV. April 6 (Interfax-Ukraine) – Mining company Ferrexpo plc with assets in Ukraine in January-March this year produced 901,000 tonnes of pellets, which is 67% less than in the same period last year.
According to the company’s stock exchange message on Thursday, production of pellets in the first quarter of 2023 increased by 2.16 times compared to the fourth quarter of 2022 (in October-December last year – 417,000 tonnes).
In 2023, only pellets with an iron content of 65% were produced.
At the same time, total production of marketable products (pellets and iron ore concentrate) for the first quarter of this year decreased by 65% compared to the first quarter of 2022, but increased by 2.1 times by the fourth quarter of 2022, to 954,000 tonnes. In particular, output of commercial concentrate in January-March 2023 amounted to 53,000 tonnes (32% more compared to the previous quarter).
“A doubling of total iron ore pellet production, principally driven by an improvement in the supply of electricity to the Group’s operations in Ukraine, which enabled the restart of a second pelletiser line in late February 2023. The Group’s year on year decline in output is linked to the operational and logistical constraints experienced since the outset of Russia’s full-scale invasion in February 2022,” the press release notes.
Focus on high grade iron ore continues, the company says.
The Group intends to continue to operate with between one and two pellet lines in the coming quarter, in line with 1Q 2023, assuming no further material changes to the operating environment and logistics availability in Ukraine.
Total iron ore sales volumes of 0.85 million tonnes during 1Q 2023, with deliveries to European customers via rail and barging operations.
Jim North, Chief Executive Officer of Ferrexpo commented: pellet production of 0.90 million tonnes in the first quarter of 2023 represents a significant increase on a quarter on quarter basis, and reflects an easing of the operational constraints experienced at the end of 2022.
“As noted in our recent full year results announcement, we now are in a position to operate a second pelletiser line (out of four in total), with our logistics networks able to deliver sales volumes to customers in line with this level of demand. Going forward, we are looking to balance production volumes with a conservative approach to maintaining Group’s balance sheet and liquidity metrics, providing a stable and consistent supply to our long-term customers,” he said.
